Not much market-priced rental housing has been built by developers in recent decades on Oahu, but such a project is about ready to rise in Kapolei.

The developer of a 318-apartment complex called The Element held a groundbreaking ceremony Tuesday in advance of vertical construction starting on the roughly $125 million project where grading and site work to install utilities is already complete.

Alaka‘i Development expects to have initial apartments along with a pool, fitness center, cafe and other amenities ready for tenants in the summer, followed by full completion at the end of next year.

Jon Wallenstrom, a principal of Honolulu-based Alaka‘i, said homes for rent at market prices typically make up 15% of new residential construction in mainland markets. But he can count only a couple of other projects on Oahu in recent decades: Kapolei Lofts, a low-rise complex of 499 apartments that opened in 2015, and Lili‘a Waikiki, a 402-unit tower that is under construction by Brookfield Properties.

“We do need more of these,” he said, referring to the project aimed at the local workforce. “Nobody who lives in one of these homes lives in California or Japan.”

Wallenstrom led the development of Kapolei Lofts for Ohio-based Forest City Enterprises, and he said the best aspects of that project helped serve as a model for The Element, which will include units with one, two and three bedrooms in three-story buildings.

Honolulu Mayor Kirk Caldwell, who attended Tuesday’s ceremony, encouraged more development of similar projects.

“There is not enough rental product of the standard and the type that you built like Kapolei Lofts,” he said.

Wallenstrom said rental rates wouldn’t be set until shortly before applications are taken this summer.

Monthly rents for available units at Kapolei Lofts range from around $2,000 to $2,200 for one-bedroom units, $2,200 to $2,600 for two-bedroom units and about $2,900 for three-bedroom units.

The Element also will include 72 one-bedroom units with monthly rent at no more than about $1,800 for households earning up to 80% of the median annual income in Honolulu. The income limit equates to $67,520 for a single person and $77,120 for a couple.

The Element is being built at Ho‘opili a block from a city rail station on Kualakai Parkway across from the University of Hawaii at West Oahu.

Alaka‘i bought the 11-acre project site from Ho‘opili’s developer, Texas-based D.R. Horton, in September for $14.1 million, according to property records.

The 72 below-market rentals at The Element will help satisfy a city affordable- housing requirement for Ho‘opili, which is master- planned for 11,750 homes. To date, about 750 homes have been built, and 30% of all homes must be affordable to households with low to moderate incomes.